The governments of Québec and Newfoundland agreed to delay expansion of the Churchill Falls hydropower project to allow Canadian Indians to take part in an environmental impact study. Negotiations have been stalled since March 1998 by the aboriginal groups’ demands to be involved in decision making.

The $4.2 billion project will expand the existing Churchill Falls plant, built 25 years ago by adding new turbines. A new dam would also be built 200 km downstream of the existing dam.

The project will add 2200 MWe to the generating capacity on the river. Around 1000 MWe of this will be used to supply Labrador and Newfoundland, while much of the remainder will be sold by Hydro-Québec to the northeastern USA.

The Indian groups, which claim they have never been compensated for the flooding of ancestral land when the original project was built, have vowed to launch an international lobbying campaign and take their protest to court in order to stop the project proceeding without their approval.

If agreement can be reached, construction could start within nine months to one year. Electricity production would commence between 2006 and 2008. Politicians hope that construction of the hydroelectric scheme will also help heal a rift between Quebec and Newfoundland. Newfoundland has claimed that Quebec obtains power from Churchill Falls cheaply, too cheaply, under a long term agreement and then sells it to the USA at a significant profit.